|[ X ]   | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|------- | ---------------------------------------------------------------------------------------
|       
|        | For the quarterly period ended **September 30, 2001**                                  
|       
|[     ] | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934     
|       
|        | For the transition period from ____________ to _____________.                          

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|Delaware(State or other jurisdiction of incorporation or organization) |  | 34-1870418(I.R.S. Employer Identification No.)
|---------------------------------------------------------------------- |  | ----------------------------------------------
|                                                                       |  |                                               
|55 North Main Street, Niles, Ohio                                      |  | 44446                                         
|(Address of principal executive offices)                               |  | (Zip Code)                                    

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|**Item 1.** | **Financial Statements**
|----------- | ------------------------

|                                                                                          | September 30,2001(Unaudited) | December 31,2000
|----------------------------------------------------------------------------------------- | ---------------------------- | ----------------
|ASSETS                                                                                    |                              |                 
|Cash and cash equivalents:                                                                |                              |                 
|Noninterest bearing                                                                       | $   854                      | $  969          
|Interest bearing                                                                          | 3,233                        | 2,864           
|Total cash and equivalents                                                                | 4,087                        | 3,833           
|Securities available for sale - at market                                                 | 40,482                       | 22,677          
|Securities to be held to maturity - at cost                                               | 10,060                       | 13,901          
|Loans receivable, net of allowance for loan losses  of $682 and $592, respectively        | 37,822                       | 35,740          
|Accrued interest receivable                                                               | 805                          | 343             
|Federal Home Loan Bank stock, at cost                                                     | 992                          | 366             
|Real estate investment, limited partnership - at equity                                   | 235                          | 263             
|Prepaid expenses and other assets                                                         | 116                          | 30              
|Prepaid federal income taxes                                                              | 21                           | 60              
|Premises and equipment, at cost less accumulated depreciation                             | 338                          | 341             
|TOTAL ASSETS                                                                              | $94,958                      | $77,554         
|                                                                                          |                              |                 
|LIABILITIES                                                                               |                              |                 
|Deposits                                                                                  | $55,257                      | $52,194         
|Accrued interest payable                                                                  | 96                           | 120             
|Accounts payable and other liabilities                                                    | 1,284                        | 1,236           
|Federal Home Loan Bank advances                                                           | 19,500                       | 5,000           
|Deferred federal income tax liability                                                     | 435                          | 246             
|TOTAL LIABILITIES                                                                         | 76,572                       | 58,796          
|                                                                                          |                              |                 
|STOCKHOLDERS' EQUITY                                                                      |                              |                 
|Preferred stock, $.01 par value, authorized 500,000 shares;
      none outstanding        | -                            | -               
|Common stock, $.01 par value, authorized  6,000,000 shares;
      1,754,411 shares issued | 18                           | 18              
|Paid in capital                                                                           | 6,747                        | 6,748           
|Retained earnings                                                                         | 13,428                       | 13,334          
|Net unrealized gains on securities available for sale                                     | 1,855                        | 1,429           
|Common stock purchased by the Employee Stock Ownership Plan                               | (1,053)                      | (1,052)         
|Unearned compensation                                                                     | -                            | (264)           
|Treasury stock- 228,212 shares and 132,662 shares at cost                                 | (2,609)                      | (1,455)         
|TOTAL STOCKHOLDERS' EQUITY                                                                | 18,386                       | 18,758          
|                                                                                          |                              |                 
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                | $94,958                      | $77,554         

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|                                                   | Three Months EndedSeptember 30, | Nine Months EndedSeptember 30,
|-------------------------------------------------- | ------------------------------- | ------------------------------
|                                                   | 2001                            | 2000                          
|Interest income:                                   |                                 |                               
|Loans receivable                                   |                                 |                               
|First mortgage loans                               | $   683                         | $   699                       
|Consumer and other loans                           | 37                              | 29                            
|Mortgage-backed and related securities             | 177                             | 230                           
|Investments                                        | 586                             | 252                           
|Interest-bearing deposits                          | 47                              | 48                            
|TOTAL INTEREST INCOME                              | 1,530                           | 1,258                         
|                                                   |                                 |                               
|Interest expense:                                  |                                 |                               
|Deposits                                           | 544                             | 541                           
|Borrowings                                         | 216                             | --                            
|TOTAL INTEREST EXPENSE                             | 760                             | 541                           
|                                                   |                                 |                               
|NET INTEREST INCOME                                | 770                             | 717                           
|                                                   |                                 |                               
|Provision for loan losses                          | 30                              | --                            
|                                                   |                                 |                               
|NET INTEREST INCOME AFTERPROVISION FOR LOAN LOSSES | 740                             | 717                           
|                                                   |                                 |                               
|Noninterest income:                                |                                 |                               
|Gain on sale of securities                         | 75                              | --                            
|Service fees and other income                      | 8                               | 17                            
|TOTAL NONINTEREST INCOME                           | 83                              | 17                            
|                                                   |                                 |                               
|Noninterest expense:                               |                                 |                               
|Equity in loss of limited partnership              | 9                               | 50                            
|General and administrative:                        |                                 |                               
|Compensation and benefits                          | 257                             | 243                           
|Occupancy and equipment                            | 19                              | 22                            
|Federal deposit insurance premiums                 | 2                               | 3                             
|Legal and audit                                    | 18                              | 24                            
|Franchise taxes                                    | 59                              | 77                            
|Other operating expense                            | 62                              | 61                            
|TOTAL NONINTEREST EXPENSE                          | 426                             | 480                           
|                                                   |                                 |                               
|INCOME BEFORE INCOME TAXES                         | 397                             | 254                           
|                                                   |                                 |                               
|Federal income taxes                               | 117                             | 64                            
|NET INCOME                                         | $   280                         | $   190                       
|EARNINGS PER SHARE                                 | $0.19                           | $0.12                         
|DILUTED EARNINGS PER SHARE                         | $0.19                           | $0.12                         

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|                                             | Nine Months Ended September 30,
|-------------------------------------------- | -------------------------------
|                                             | 2001                           
|                                             |                                
|Net income                                   | $ 579                          
|Other comprehensive income:                  |                                
|Unrealized gains (losses) on securities:     |                                
|Unrealized gains (losses) arising for period | 843                            
|Related income tax                           | 287                            
|                                             | 556                            
|                                             |                                
|Reclassification adjustment:                 |                                
|Gain included in net income                  | (197)                          
|Related income tax                           | 67                             
|                                             | (130)                          
|Other comprehensive income                   | 426                            
|                                             |                                
|COMPREHENSIVE INCOME                         | $  1,005                       

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|                                                                                                             | Nine Months Ended September 30,
|------------------------------------------------------------------------------------------------------------ | -------------------------------
|                                                                                                             | 2001                           
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                         |                                
|Net income                                                                                                   | $579                           
|Adjustments to reconcile net income to net cash
   provided by (used in) operating activities                |                                
|Deferred income taxes                                                                                        | (31)                           
|Depreciation                                                                                                 | 22                             
|Amortization of deferred loan fees/costs                                                                     | (10)                           
|Amortization of discounts and premiums on investments and
            mortgage-backed and related securities | (17)                           
|Recognition and Retention Plan shares                                                                        | 264                            
|Gain on sale of securities                                                                                   | (197)                          
|ESOP shares allocated                                                                                        | (1)                            
|Provision for loan losses                                                                                    | 90                             
|Equity in loss of limited partnership                                                                        | 28                             
|Federal Home Loan Bank dividends                                                                             | (39)                           
|                                                                                                             | 688                            
|Net increase (decrease) in accrued interest receivable
            and prepaid expenses and other assets     | (509)                          
|Net increase in accrued interest,  accounts payable and other liabilities                                    | 25                             
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                                                    | 204                            
|                                                                                                             |                                
|CASH FLOWS FROM INVESTING ACTIVITIES                                                                         |                                
|Proceeds from sale of securities available for sale                                                          | 5,995                          
|Purchase of FHLB stock                                                                                       | (587)                          
|Purchase of securities available for sale                                                                    | (28,972)                       
|Proceeds from maturities of securities available for sale                                                    | 6,000                          
|Proceeds from principal payments on mortgage-backed
            and related securities                       | 3,873                          
|Net (increase) decrease in interest-bearing deposits with banks                                              | (370)                          
|Net (increase) decrease  in loans                                                                            | (2,161)                        
|Additions to premises and equipment                                                                          | (20)                           
|NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                                                          | (16,242)                       
|                                                                                                             |                                
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                         |                                
|Net increase (decrease) in savings accounts, MMDAs and NOW accounts                                          | 576                            
|Net increase in certificates of deposits                                                                     | 2,487                          
|Purchase of treasury shares                                                                                  | (1,155)                        
|Cash dividends paid                                                                                          | (485)                          
|Proceeds from FHLB advances                                                                                  | 14,500                         
|Repayment of note payable                                                                                    | --                             
|NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                                          | 15,923                         
|                                                                                                             |                                
|NET DECREASE IN CASH                                                                                         | (115)                          
|                                                                                                             |                                
|CASH AT BEGINNING OF PERIOD                                                                                  | 969                            
|CASH AT END OF PERIOD                                                                                        | $    854                       
|                                                                                                             |                                
|Cash paid during the period for:                                                                             |                                
|Interest on deposits                                                                                         | $    2,163                     
|Income taxes                                                                                                 | $    209                       

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|                                                | Three Months EndedSeptember 30, | Nine Months EndedSeptember 30,
|----------------------------------------------- | ------------------------------- | ------------------------------
|                                                | 2001                            | 2000                          
|BASIC                                           |                                 |                               
|Net income                                      | $          280                  | $          190                
|Earnings applicable to basic earnings per share | $           280                 | $           190               
|Average common shares                           | 1,560,815                       | 1,658,108                     
|Less average unallocated ESOP shares            | 137,471                         | 157,836                       
|Average common shares outstanding               | 1,423,344                       | 1,500,271                     
|Earnings per share - basic                      |                                 | $0.19                         
|diluted                                         |                                 | $0.19                         

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|**Item 2.** | **Management's Discussion and Analysis of Financial Condition
and Results of Operations**
|----------- | -----------------------------------------------------------------------------------------

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> the economic impact of the terrorist attacks on September 11, 2001 and the response of the United States to those attacks;
> 
> the strength of the United States economy in general and the strength of the local economies in
> which we conduct operations;
> 
> the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate
> policies of the Federal Reserve Board;
> 
> inflation, interest rate, market and monetary fluctuations;

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> the timely development of and acceptance of our new products and services and the perceived
> overall value of these products and services by users, including the features, pricing and quality
> compared to competitors' products and services;
> 
> the willingness of users to substitute competitors' products and services for our products and
> services;
> 
> our success in gaining regulatory approval of our products and services, when required;
> 
> the impact of changes in financial services' laws and regulations (including laws concerning taxes,
> banking, securities and insurance);
> 
> the impact of technological changes;
> 
> acquisitions;
> 
> changes in consumer spending and saving habits; and
> 
> our success at managing the risks involved in the foregoing.

|Item 1. | Legal Proceedings:                                                                              
|------- | ------------------------------------------------------------------------------------------------
|       
|        | There are no matters required to be reported under this item.                                   
|       
|Item 2. | Changes in Securities:                                                                          
|       
|        | There are no matters required to be reported under this item.                                   
|       
|Item 3. | Defaults Upon Senior Securities:                                                                
|       
|        | There are no matters required to be reported under this item.                                   
|       
|Item 4. | Submission of Matters to a Vote of Security Holders:                                            
|       
|        | There are no matters required to be reported under this item.                                   
|Item 5. | Other Information:                                                                              
|       
|        | There are no matters required to be reported under this item.                                   
|       
|Item 6. | Exhibits and Reports on Form 8-K:                                                               
|       
|        | (a)      No exhibits are filed herewith.                                                        
|       
|        | (b)      Reports on Form 8-K:                                                                   
|       
|        | No reports on Form 8-K were filed by the Registrant during the quarter ended September 30, 2001.

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|                        |  | **FIRST NILES FINANCIAL, INC.**
Registrant
|----------------------- |  | ------------------------------------------
|                        |  |                                           
|                        |  |                                           
|Date: November 13, 2001 |  | By:                                       
|                        |  |                                           
|                        |  |                                           
|Date: November 13, 2001 |  | By:                                       

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